Sun: Japanese Average Cash Earnings, Japanese Snap ElectionMon: Swiss Consumer Confidence (Jan), Mexican
\nInflation (Jan), US Consumer Inflation Expectations (Jan), Australian
\nHousehold Spending (Dec)Tue: EIA STEO; Norwegian prelim. CPI (Jan), US NFIB (Jan), Weekly ADP, ECI (Q4), Export\/Import Prices (Dec)Wed: BoC Minutes (Jan), OPEC MOMR; ECB Wage Tracker (post-meeting); Chinese Inflation (Jan), Norwegian GDP (Q4), US NFP (Jan)Thu: IEA OMR, EU Informal Leaders Retreat;
\nJapanese PPI (Jan), UK GDP Prelim. (Q4), GDP (Dec), US Weekly\/Continuing
\n Claims; Existing Home Sales (Jan), South Korean Export\/Import Prices
\n(Jan)Fri: Indian WPI (Jan), Swiss CPI (Jan), EZ Prelim. Employment (Q4), GDP 2nd (Q4), US CPI (Jan)<\/p>\n
Japanese Average Cash Earnings (Sun):<\/p>\n
Japan\u2019s
\nDecember average cash earnings data is due on Sunday, with consensus
\nexpecting headline wages to accelerate to 1.0% Y\/Y from 0.5%. The
\nNovember release showed a sharp slowdown in wage growth, largely
\nreflecting a steep fall in one-off bonus payments outside peak payout
\nperiods, leaving real wages deeply negative amid still-elevated
\ninflation. ING expects a clearer rebound in December, supported by
\nstrong winter bonuses and recent easing in inflation, which should help
\nreal cash earnings turn positive. The desk says a sustained improvement
\nin wage dynamics would bolster the BoJ\u2019s confidence that a wage-price
\ncycle is taking hold, supporting the case for further rate hikes from
\nQ2.<\/p>\n
Japanese Snap Election (Sun):<\/p>\n
Japanese PM Takaichi Japanese Economy Watchers Survey (Mon): <\/p>\n Japan\u2019s BoC Minutes (Wed):<\/p>\n The minutes followed the January Chinese Inflation (Wed): <\/p>\n China is set to publish its US Jobs Report (Wed): <\/p>\n Note: the January jobs report, UK GDP (Thu): <\/p>\n The UK is due to release preliminary US CPI (Fri):<\/p>\n Note: the January consumer price
\ncalled a snap election for the 8th of February. Aiming to capitalise on
\nher high approval rating and extend LDP\u02bcs slim majority in the Lower
\nHouse, which would allow her to pass policy with less friction. A recent
\n poll (Feb 2) via Asahi shows that the ruling coalition could secure
\nmore than 300 seats, far surpassing the 233 required for a simple
\nmajority; putting the LDP-JIP partnership on course to potentially
\nsecure a two-thirds ‘super’ majority (310 seats). Note, should the
\nLDP-JIP secure a two-thirds majority, it can override the Upper House to
\n pass legislation. Exit polls are typically released within minutes of
\npolls closing (20:00 JST \/ 11:00 GMT \/ 06:00 EST), while a large share
\nof single-member district results are reported within the following 2\u20134
\nhours. Under a LDP victory, the immediate market reaction is expected to
\n see a steepening of the JGB yield curve, as it would potentially give
\nthe PM scope to pursue expansionary fiscal policies. Credit Agricole
\nexpects gains in the Nikkei and USD\/JPY alongside curve steepening. If
\nthe LDP-JIP bloc requires support from another party, most likely the
\nDPP or Sanseito, fiscal and political uncertainty could be priced in, as
\n opposition partners may push for income tax cuts or broader VAT
\nreductions, potentially triggering a deeper sell-off in JGBs. Should the
\n LDP lose, a new government would likely prompt a flatter yield curve
\nand JPY strength, reflecting the prospect of greater fiscal restraint
\nthan under Takaichi and a higher tolerance for BoJ rate hikes. Credit
\nAgricole expects this to lift short-end yields and flatten the JGB
\ncurve. An in-depth preview can be found here<\/a>.<\/p>\n
\nEconomy Watchers Survey for January is due on Feb 9. The Current
\nConditions index slipped to 48.6 in December, remaining below the 50
\nthreshold, while the Outlook index rose to 50.5, signalling cautious
\noptimism for the months ahead. The survey is closely watched by the BoJ
\nas a leading indicator of private consumption and service-sector
\nmomentum. Any further improvement in service-related sentiment would
\nsupport the Bank\u2019s view that service price inflation is becoming more
\ndurable.<\/p>\n
\ndecision to hold rates at 2.25%, in line with expectations and matching
\nthe lower end of the BoC\u2019s own estimate of neutral. The statement
\nfocused on uncertainty, saying it was elevated and that risks were being
\n monitored closely, and added that the central bank was prepared to
\nrespond if the outlook changed. The Monetary Policy Report left
\nnear-term inflation forecasts unchanged but raised the fourth-quarter
\n2026 projection, while quarterly GDP forecasts were lifted across 2026.
\nSince then, Governor Macklem has warned the BoC must be careful not to
\nmisdiagnose economic weakness amid a structural shift in the Canadian
\neconomy following a deterioration in relations with the United States.
\nHe said cutting rates in response to weak activity risked fuelling
\nfuture inflation if the weakness reflected lower productive capacity
\nrather than a cyclical demand downturn, and that overstimulating demand
\nwhen the problem was structural could delay necessary adjustment. The
\nBoC appears set to remain on hold for the foreseeable future barring a
\nsharp change in the outlook, with market pricing showing about 9bps of
\nhikes by year-end.<\/p>\n
\n January CPI and PPI figures after December data showed headline CPI
\nrising 0.8% Y\/Y, a 34-month high driven largely by food prices, while
\ncore inflation held at 1.2% and producer prices stayed in deflation at
\n-1.9% Y\/Y. ING expects inflation pressures to cool in January,
\nforecasting CPI at 0.5% Y\/Y as Lunar New Year effects weigh on prices,
\nwhile PPI is seen remaining negative for a 40th consecutive month but
\nimproving to around -1.3% Y\/Y amid firmer commodity prices. Analysts
\ncontinue to warn that underlying demand remains weak despite the recent
\npick-up in headline inflation, with overcapacity and factory-gate
\ndeflation persisting as key drags. As a result, the data is unlikely to
\nshift expectations for further policy support this year.<\/p>\n
\n originally scheduled for 6th February, was rescheduled to Wednesday,
\n11th February at 08:30EST\/13:30GMT because of the partial US government
\nshutdown. Recent labour market data have shown resilience despite other
\npolicy challenges. During the week corresponding to the traditional BLS
\nsurvey window, weekly initial jobless claims stayed low at 210k after
\nrevisions, compared with 224k ahead of the December data. Continuing
\nclaims eased to 1.827mln in the survey week from 1.914mln heading into
\nthe December report. \u201cThere is no evidence that layoffs are picking up.
\nThere are firms that are trying to reduce their headcount, but this is
\nbeing done almost exclusively through attrition rather than outright job
\n cuts,\u201d Santander said, adding that \u201clayoffs on an underlying basis are
\nroughly steady.\u201d Wells Fargo expects the January report to leave the
\nlabour market picture broadly unchanged, with payroll growth of about
\n80k and unemployment steady at 4.4%, noting that hiring could be
\ntemporarily boosted by fewer seasonal layoffs. Risks to unemployment are
\n nevertheless seen to the upside, while benchmark revisions are likely
\nto show that last year\u2019s job growth was weaker, reinforcing a gradual
\ncooling in labour market support for incomes and consumption. At its
\nJanuary meeting, the Fed tweaked its risk characterisation of the labour
\n market, replacing \u201cjob gains have slowed this year, and the
\nunemployment rate has edged up through September,\u201d with \u201cjob gains have
\nremained low, and the unemployment rate has shown some signs of
\nstabilisation,\u201d which analysts described as a positive upgrade. Even so,
\n Chair Powell said risks to employment on both the upside and downside
\nhave diminished but not disappeared, making it difficult to judge
\nwhether mandate risks are fully balanced. Traders will also watch for
\nany impact from extreme weather. Oxford Economics said storms occurring
\nduring the payroll reference period have historically had a greater
\nnegative effect on net nonfarm employment and hours worked, particularly
\n in construction, but added that the latest storm falls outside that
\nwindow, which should limit potential downside effects on the January
\nreport.<\/p>\n
\nQ4 GDP alongside December monthly output. Consensus expects Q4 GDP
\ngrowth of 0.1% Q\/Q from 0.2% and 1.3% Y\/Y from 1.2%, with December GDP
\nseen rising 0.3% M\/M from 0.1%. Investec expects a softer 0.2% M\/M print
\n for December after November\u2019s strong 0.3% rebound, which was boosted by
\n a recovery in car production following the Jaguar Land Rover
\ncyberattack, alongside firmer retail sales. While most of the production
\n bounce likely occurred in November, residual strength from auto
\nbacklogs, steady services output and a modest recovery in construction
\nare seen supporting December activity. On this basis, Investec forecasts
\n Q4 GDP growth of 0.2% Q\/Q, a slight acceleration from Q3\u2019s 0.1%, and
\nsays this would provide a constructive handover into Q1, where growth is
\n expected to firm further.<\/p>\n
\nreport, originally scheduled for 11th February, was pushed back to 13th
\nFebruary at 08:30EST\/13:30GMT because of the partial US government
\nshutdown. While the Fed\u2019s January statement upgraded its economic
\nassessment by replacing \u201ceconomic activity has been expanding at a
\nmoderate pace\u201d with \u201cexpanding at a solid pace\u201d, \u201cjob gains have slowed
\nthis year\u201d with \u201cjob gains have remained low\u201d, and \u201cthe unemployment
\nrate has edged up\u201d with it having \u201cshown some signs of stabilisation\u201d,
\nit said \u201cinflation remains somewhat elevated\u201d, relatively unchanged from
\n its prior view that \u201cinflation has moved up since earlier in the year
\nand remains somewhat elevated\u201d. At his post-meeting press conference,
\nChair Powell said inflation had made limited net progress over the past
\nyear, with core PCE showing little improvement. He said most of the
\novershoot stemmed from goods prices, largely driven by tariffs, which he
\n characterised as a one-off rather than demand-led effect. Powell noted
\nthat many tariff effects had already passed through the economy and
\nexpects goods and tariff-related inflation to peak around mid-year.
\nInflation remains somewhat elevated, but recent outcomes have been
\nbroadly in line with expectations. He added that short-term market-based
\n inflation expectations have fully retraced, while longer-term measures
\nsignal confidence in a return to the Fed\u2019s 2% target. Powell said
\nincoming data point to clearer improvement in the outlook, adding that
\nconfirmation that tariff effects are fading would support policy
\nloosening. Some analysts have recently highlighted Truflation\u2019s
\ninflation measure, which suggests price pressures are easing. Pantheon
\nMacroeconomics, however, argues that the sharp fall in Truflation\u2019s
\ndaily measure overstates disinflation, noting that it is driven largely
\nby new rents and mortgage interest costs that respond quickly to market
\nshifts, while official CPI uses broader, lagged shelter measures,
\nimplying a much more gradual decline. Pantheon sees Truflation as useful
\n for niche components, but not a reliable guide to headline inflation.<\/p>\n